Sunset Hills authorizes use of eminent domain for Novus development
July 20, 2005 - The Novus Development Co. now has the power to use eminent domain to help construct a $165.2 million shopping center at Interstate 44 and Watson Road.
The Sunset Hills Board of Aldermen last week approved ordinances authorizing the use of eminent domain and amending a redevelopment agreement between the city and Novus for the project that will raze more than 250 homes and several businesses in the Sunset Manor subdivision.
The Board of Aldermen in May approved Novus as the developer, entered into a redevelopment agreement with the company and approved $42 million in tax-increment-financing and $20 million in transportation development district reimbursements.
Aldermen voted 6-1 July 12 to adopt the ordinance authorizing eminent domain with Ward 3 Alderman Jan Hoffmann opposed.
Ward 1 Alderman John Tipton, whose ward includes Sunset Manor, was absent.
"My constituents were hands down against the eminent domain," Hoffmann said. "They were against the TIF, they thought it was way too high. They were against the redevelopment for a full litany of many different reasons, and I feel that I'm elected to represent my constituents, so I feel like I need to vote the way they ask me to vote, but personally I also think it's wrong to kick people out of their homes. I have a real moral issue with that as well."
The second ordinance, which authorized the amendment to the redevelopment agree-ment, was unanimously approved. The Board of Aldermen suspended the rules on both measures so they could be approved that night.
The project area includes about 300 parcels, which contain 254 homes and several businesses that will be razed. Only Denny's restaurant and the Hampton Inn will remain.
The city's TIF Commission voted 6-5 in April to reject Novus' proposal, with the city appointees favoring the project and representatives from the county, the Lind-bergh School District and other taxing entities opposing the deal.
One city appointee was absent from the meeting, and Ward 2 Alderman John Smith had said afterward that the missing member favored the TIF. If so, the vote would have been deadlocked 6-6 and the commission would not have been able to make a formal recommendation. By law, the Board of Aldermen could not have considered the matter without a recommendation from the TIF Commission.
Novus recently submitted a list of 85 properties whose owners had not yet signed a contract with the company and asked the city to grant Novus the use of eminent domain. Joe Walsh, Novus general counsel, said that since submitting that list, the company had signed contracts with several more residents on that list, and he expects to sign even more.
"It changes every day ... We really would like to continue to sign people, we're working hard to do that," Walsh said. "... We believe that it's important to try to sign as many people as we can prior to condemnation."
Many residents who spoke at the meeting said they weren't getting a fair price for their homes. Residents had said at previous meetings that they wanted Novus to base its purchase price on current assessments. The company is offering 175 percent of the value of homes based on 2003 assessments, which was the only assessment available when the company began making offers.
Reassessment notices were sent in March and most residential properties in the Sunset Manor area had increased in value by about $20,000.
Many residents also have said that if they lose their home in Sunset Manor, they will not be able to afford another home in the area or in the Lindbergh School District.
"Half of the people who are being affected on those 85 properties are families or they're older people. You can throw up your hands, but we're going to be homeless, and it's disrupting children's lives. It's disrupting all kinds of things, and I want you to consider that please," resident Kathleen Sanchez said.
Under the eminent domain process, three court-appointed commissioners will set the fair-market value of the properties.
With the threat of eminent domain looming over their heads, residents soon will have to choose whether to accept Novus' offer of 175 percent of the 2003 assessment value or take their chances with what the assessors will determine.
"If it goes to eminent domain in court, the court will make the call on what's the fair pricing," Smith told the Call. "It could be more or less than what they've been offered."
Several speakers reminded Mayor Jim Hobbs that a week before the meeting he had said that eminent domain would only need to be used on one or two properties, not 85.
"Well, what I'm saying is that I hope that it still is that," Hobbs told the Call. "By the time — you know these things haven't gone to court yet, and I think they'll settle out of court. I honestly do. I think there will be just a handful or less that will actually go to court. You know everybody is doing their posturing, you know, to get the most money ..."
Two lawsuits have been filed against the city by opponents of Novus' proposal.
One lawsuit was filed by 11 Sunset Hills residents and seeks to have the city's Board of Aldermen consider initiative petitions to repeal two enabling ordinances for the project. If the board fails to repeal the ordinances, the suit seeks a public vote to repeal the enabling ordinances.
The second lawsuit was filed by Sunset Hills residents and commercial property owners along with Missouri Residential I, an affiliate of Westfield America Inc. The lawsuit contends the city violated the state's TIF statutes and the U.S. and Missouri constitutions in approving the TIF assistance and redevelopment agreement.
Attorneys representing those who have filed the lawsuits against the city also voiced their opposition to the ordinances.
Gerald Carmody of Carmody Mac-Donald urged the board not to pass the legislation and instead to wait until the lawsuits were resolved.
He explained that if the board approved the eminent domain legislation, residents would have to move. If the court hearing the cases decide the TIF ordinance is null and void, then it will be too late for the residents.
"If this redevelopment can't go forward, those people have already been displaced. They're gone, and we have vacant property in Sunset Manor and an absolutely irre-parable situation on our hands, so I im-plore you to consider what I think you should do, and that is simply to wait for a resolution of votes," Carmody said.
Smith told the Call the city could not wait any longer.
"Who knows how long this lawsuit or suits might take," Smith said. "I think things have to move ahead and just delaying things at this point doesn't really serve anyone."